Uber suing city over rule limiting number of drivers

Uber Technologies Inc. is taking New York City to court over the government’s decision to cap the number of ride-hailing drivers allowed on the streets.

Officials partly justified restraints on for-hire drivers as a way to reduce congestion. In the suit filed Friday, Uber argues the city doesn’t have the evidence to prove that claim. The company also alleges that Mayor Bill de Blasio is treating the business unfairly. According to a copy of the complaint provided by Uber, the company said the mayor doesn’t intend to review ongoing congestion studies on their merits and instead has already committed to perpetually cap the number of drivers in the city.

“No legal challenge changes the fact that Uber made congestion on our roads worse and paid their drivers less than a living wage," de Blasio spokesman Seth Stein said in a statement about the suit. "The city’s new laws aim to change that.”

Uber also argues that New York City is superseding the state’s authority to set the number of professional drivers on the road. Constraints on the industry “will have a disproportionate impact on residents outside of Manhattan who have long been underserved by yellow taxis and mass transit,” Uber writes in the complaint.

Carving out a path for expansion in one of the world’s biggest transportation markets is important for Uber. Earlier Friday, the company reported an adjusted loss of $1.8 billion for 2018 and a slowdown in quarterly sales growth. The company is targeting an initial public offering by the middle of the year.

For New York, the lawsuit reflects the increasingly combative relationship between the city and global technology companies. Two weeks ago, Lyft Inc. and another ride-hailing startup, Juno USA LP, sued the city’s transportation commission over the implementation of minimum pay rules for drivers. On Thursday, Amazon.com Inc. said it was walking away from plans to build a sprawling, new office in Queens to support 25,000 employees. Airbnb Inc. and other home-rental companies are fighting the city in court over its demand that they turn over renter data.

In Uber’s lawsuit, the company said the cap deprives many workers of being able to reap the rewards of the minimum pay guarantee the city separately implemented. Uber also appealed to New Yorkers’ frustration with public transportation in an apparent bid to garner support. According to the complaint, the subway system “has long been over capacity, underfunded and poorly maintained, and its defects disproportionately affect lower-income neighborhoods and areas with substantial minority populations.”

The case is Zehn-NY LLC v. City of New York, Supreme Court of the State of New York, New York County.

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